The Federal Reserve has announced it will purchase the housing-related debts of Fannie Mae and Freddie Mac, in a move designed to free up mortgage money.
The National Association of Realtors (NAR) said this would be “critical” to the recovery of the US housing market, currently awash with stalling prices and foreclosed homes.
In its announcement, the Federal Reserve said it will purchase up to $100 billion of debt from primary dealers through a series of competitive auctions.
NAR president Charles McMillan said:
“This is one of the key actions we’ve been advocating ever since the Treasury altered its course on how it would use the $700 billion recovery package passed in September.
“This is great news for home buyers and sellers and we applaud the Fed for taking this historic step.”
Experts from NAR added the move would directly bring down long-term interest rates, which in turn is expected to spark an increase in homes sales.
The NAR represents estate agents and real estate companies across the US and acts as a pressure group and trade body.